No job, no marriage, no home: She thought her son hit rock bottom - but entering rehab cost him

When Danielle's* son David* went into a long-term rehabilitation centre to address his severe alcoholism, she believed he had already lost everything there was to lose: his job, his marriage, his home and his health.

Luckily, David was caught by the welfare safety net: he claimed Newstart for the first time in his life, with 80 per cent of the money going to the rehab facility to subsidise his treatment, keeping the rest to spend on toiletries and other personal items.

But then he lost that too.

The mother of an alcohol dependent man on Newstart receiving rehab treatment, who says her son is unable to meet Newstart activity requirements when he is required to be in lockdown in rehab.Credit:Fairfax Media

"About three weeks ago I picked him up to take him out to lunch, and he said he didn’t have any money," Danielle, 61, said.

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"I said, 'What’s happening?' and he just said his Newstart had stopped. Then he talked about this medical exemptions business."

Following a government welfare crackdown announced by then-treasurer Scott Morrison in the 2017 budget, many drug and alcohol dependent people in rehabilitation are being hit with the same problem; a sudden cut-off of their Newstart payments.

In May 2017, Mr Morrison said the new rules would "simplify the compliance system and provide vulnerable people with support", and "take into account individual circumstances to ensure that people with genuine issues are not unfairly penalised".

The crackdown, implemented in July this year, targeted welfare recipients who don’t turn up for their job-seeking appointments because they are drug-affected or drunk.

Under the new rules, their payments can be withheld.

Job-seekers participating in drug and alcohol treatment are supposed to be afforded a medical exemption from attending appointments, but, in an apparent misapplication of the rules by job agencies, many are being told they can no longer claim the exemption.

Unable to go anywhere because they are in lockdown in rehab, they lose their only income.

Danielle, a self-funded retired public servant, has been giving her son $100 a week until the issue is sorted out, but many drug dependent people have no such support.

The problem, rehabilitation services say, is widespread and, given that Newstart subsidises the running costs of most charity-run rehab facilities, the facilities stand to lose hundreds of thousands of dollars in funding.

"You’ve got the users in a downward spiral, and you’re getting into treatment, and all of a sudden there is an administrative barrier," said Garth Popple, the chief executive of rehabilitation service We Help Ourselves (WHOS), which has 250 beds across NSW and Queensland.

His organisation has forecast it will lose $150,000 in funding over a year as a result of the wrongful cessation of Newstart payments to its clients.

He has also had to hire a temp to help manage the extra administrative workload.

Sharon Tuffin, the chief executive of the Karralika program, a Canberra-based drug and alcohol service, said people wanting to address their addiction had been disadvantaged by the "variable implementation" of the policy.

"We should be encouraging people who are taking the step to participate in drug and alcohol treatment, rather than further disadvantaging them," Ms Tuffin said.

Robert Stirling, deputy chief executive of the Network of Alcohol and other Drugs Agencies (NADA) said treatment providers reported the recent changes had caused "undue stress and burden on clients and have been a barrier to accessing treatment".

They had also placed an increased administrative burden for rehab services, which were forced to liaise with Centrelink when their clients were cut off, he said.

Mr Stirling said client contributions from their welfare payments make up about 15 per cent of the costs of treatment in NGO-run rehab centres, and their loss was impacting on the quality of services.

A spokesperson for the Department of Jobs and Small Business said the department had "recently provided" guidance to employment services providers "to ensure they are correctly implementing the policy".